The Impact Of Community Banks In Economic Growth And Development Of Nigeria (a Case Study Of Ndi-afia Community Bank In Enugu-urban 2000-2004).

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Not, every Nigerian knew exactly the paramount impact of Community Banks to our dear nation and to economic growth and development of our father land Nigeria. Most of the time, it sounds aloof and appears trivial to the ignorant and the unconcerned. We just hear about this bank without really care how to set it up or even support it.

          However, Community Banks established in Nigeria to help remedy the problem of lack of development that has been facing Nigeria since after World war II in some areas of the country.

          The fundamental concepts of a Community bank is of  self-sustaining financial institution owned and managed by community or a group of communities for the purpose of providing credit deposit, banking and other financial services to its members, largely on the basis of their self-recognition and credit worthiness.

          This research, work has five chapters. The first chapter of this document contains a general discussion ie introduction of the topic of scrutinizes Community Banking. It want further to state the background of the study, statement of problems, objectives of the study, statement of hypothesis, scope and limitations of the study, finally the definition of terms.

          A number of past related literature were vividly reviewed in chapter two for the purpose of effective and comprehensive study in other words, highlighted the objectives and functions of Community Banks vice-versa.

          Chapter three deals with the research design and methodology, method of research design, sources of data, selection of population, sample and sampling techniques. It also deals with method of data presentation and analysis.

          The data got from research survey were analyzed and interpreted in chapter four.

          Finally, the fifth chapter made by the researcher saw to the summary of findings, recommendation and conclusion.

          The major findings of the study is that Ndiafia Community Banks been the case study of this research work could be rited as fair and good as regards its roles in her services and this is obviously manifested by their performance since the bank was open.



          Honestly, this sheet cannot contain the chronicles of people who in no small measure contributed to see that my reminds me of the saying that “NO SUCCESS IN LIFE IS EXPLICITLY PERSONAL”, Obviously a tress does not make a forest!, life also is not a bed of roses and so the success of a man is the seed soon in perfect tears. However dark the night must be, it must surely break into a day.

          Therefore, the complexity of this work is a clear testimony that all and sundry contributed immensely in one way or the other towards making this piece of work what it is today.

          It is in this regard I remain particular loyal, special grateful and having profound respect to my able supervisor in the person of SIR N.N. ODOH, for his professional approval and guidelines “BRAVO SIR”.

          My unreserved appreciation goes to my friends who carefully read through this work, gave some meaningful corrections and suggestions that later metamorphosed into this master piece, Chielo Kingsley, Igu Okey, eze Stephen, Anibueze Ifeanyi, Agu Labian, Okwo Cletus, Okeke Ngozi, Anadi Chioma, Helen, and my Big Aunty Josephine. They are quite instrumental to the achievements I made in this discipline.

          History will not forgive me if I fail to acknowledge the potential lectures in the department of Banking and Finance IMT, for their professional teaching and advices given to me throughout my academic pursuit, Mr. J. C. Odike, Dr. J. Orij (H.O.D), Mr. Udeh S.O., Mr. J. Iloh, Mr. Okafor O., Mr. Ikechukwu B.T. and Mr. Okafor P.; Infact with them, I was encouraged.

          Coming near home, I must at this juncture express my indebtedness to my family members, Chief and Mrs. G.O. Igwe (my parents), Obinna, Chinedu, Uzodimma, Ogbanna, Nnenna and Uche (my brothers and sister), for their unlackadaisical and unrelenting efforts which has given me a lot of inspiration; and by the special grace of god gave this work a sound take-off, both financially and otherwise mobilization more especially at this ‘sappy’ period. Instant without them, this work would have been a mirage. I indeed owe them all great thanks.

Finally, to my heavenly father, God Almighty, I thank him for his divine guidance, protection and inspiration throughout the development this work and my academic pursuit.



Title page                                                                                i

Approval page                                                                        ii

Dedication                                                                               iii

Abstract                                                                                  iv

Acknowledgement                                                                             vi

Table of content                                                                      ix


1.0     Introduction                                                                            1

1.1            Background of the study                                                         1

1.2            Statement of the Problem                                                        3

1.3            Purpose/objective of the study                                                5

1.4            Research Questions                                                       6

1.5            Research Hypothesis                                                     7

1.6            Significance of the study                                                         9

1.7            Scope and Limitation of the study                                 10

1.8            Definitions of terms                                                       11

Reference                                                                       12

CHAPTER TWO                           

2.0     Review of Related Literature                                         13

2.1            Origin of community Banks                                          13

2.2            Nature and Scope of Community Banks                       16

2.3            Concept of Community Banks                                                18

2.4            Objectives of Community Banks                                   20

2.5            Functions of Community Banks                                             21

2.6            Ownership Structure of Community Banks                            22

2.7            Functions of National Board for Community Banks     23

2.8            Central Bank of Nigeria Control measures                             

to Community Banks                                                    25

2.9            Community Bank and the National financial institutions       26

2.10       Community Bank and Local Economic Development   27

2.11       Problems confronting Community Banks                      33

References                                                                      36


3.0     Research Design and Methodology                                38

3.1            Research Design                                                            38

3.2            Sources of Data                                                             38

3.3            Population                                                                     40

3.4            Sample and sampling Techniques                                  40

3.5            Method of Data Analysis                                                        41

References                                                                      43


Data presentation and Analysis Interpretation                       44

4.1            Analysis by percentage Distribution                              44



Summary of Findings, Recommendation and Conclusion                64

5.1            Findings                                                                         64

5.2            Recommendation                                                           66

5.3            Conclusion                                                                     68

Bibliography                                                                  70








          In Nigeria and in other developing countries alike the problem of credit extension to the rural dwellers (who usually dominate the population) and cannot afford the much sough collateral being demanded by conventional financial institutions has been such a persistent Nigeria case, that government after government have been making persistent efforts to remedy the situation. The financial needs of these rural dwellers pose a double problem in that part from the risk inherent in such credit in extension, it is not case effective because of the large number of accounts involved with little amounts. Also the inability of those group to have access to credits compounds the vicious circle of poverty in the economic system (Ugwuoke K. 2000 p.21).

          However, the development of these rural areas where majority of the population dwell happens to be bed rock of the economy. The establishment of Community Bank was done in order to strengthen its programmes of grassroots economic development (YOKUBU M.O. 2000 p. 36)

          The fundamental, concept in the establishment and operation of Community banking system is that of a self sustaining financial institutions, owed and managed by a community or a group of communities for the purposes of providing credit, deposit, banking and other financial services within the area to its members largely on the basis of their self recognition  and credit worthiness. It is in contradiction to the near total reliance as the basis for giving credit, it was designed to ensure that bank Community or group of communities may establish bank for the purposes of promoting rural development improving the economic status of small-scale producers both in the rural and urban area enhancing the rapid development of productive activities especially in the rural areas to support desirable and sustainable rural economic growth in the Nigeria Banks that are licensed under persons various types of deposits including savings, time and target deposit issue for the purpose of raising funds, redeemable debentures to interested parties.

          In the same vein the Community banking took off in 1990. when president on power ( C in C General Ibrahim Babangidi) in his annual budget speech announced that the Community Banking system would be introduced into the Nigerian Financial system. The Community bank implementation committee (CBIC) which established for general supervisions, promotion, monitoring and development of the Community Bank act under the control of (NBCB) National Board for Community Banks and (CBN) Central Bank of Nigeria (Ukamenam C. O. 2001 p. 9).



a.       The major problems which Community banks faces is how harness those abundant resources for the development of the rural areas, bearing in mind that those resources are minutely held by the vast population of the rural dwellers.

b.       The banking sector as the prime mover of the nations economic life is seen as the most viable sector to make this dream a this dream a reality, but then given the Nigerian situated especially (Enugu Urban) with vast area of land and how income base, the task before


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The Impact Of Community Banks In Economic Growth And Development Of Nigeria